Shareholder Activism in 2014: Half Year Review

Activist Insight recently released its half-year review. Activist Insight, which provides market analysis and chronicles critical developments in activist investing, made the following observations regarding U.S. activist investing trends for the first half of 2014, including:

While the US continued to dominate public instances of activism (with 127 campaigns initiated), a significant number were waged throughout Europe, Canada and the rest of the world.

The average US stock held by an activist for at least two months in H1 2014 appreciated by an annualized 51.0%*, compared with 16.4% for the S&P 500.

The proportion of activists seeking board representation increased by 9.16 percentage points in a survey of all activist tactics used in H1 2014 against H1 2013. Pushing the issuer towards a sale or merger was also more popular this year. Conversely, activist demands for share repurchases or dividends fell in popularity, while the removal of a CEO or board member was also called for less frequently as a proportion of all strategies used.

Activists were more likely to compromise with management in relative and absolute terms, with 15.3% of all resolved campaigns in H1 2014 ending thus, compared with 8.1% of cases in the same period in 2013.

45% of the activists who initiated new public campaigns in H1 2014 made demands related to M&A activity.

About

Norton Rose Fulbright's Special Situations Team has played a leading role in Canada’s most high-profile shareholder activist and defence mandates, as well as complex reorganization transactions. The Special Situations Law blog is about sharing our insights with you. With videos discussing shareholder activism, links to relevant case law and legislation and incisive commentary about regulatory and legal developments, our blog includes a wealth of resources and perspectives on special situations law.